(MENAFN- Daily Forex) Potential signal:

• I am buying above the 154.50 level. Stop at 153.50 and aim for 157.
• The USD/JPY pair continues to consolidate below key resistance.
• With firm support levels and a persistent interest rate advantage favoring the U.S. dollar, I expect the pair to grind higher over time despite short-term hesitation.

The US dollar has gone back and forth against the Japanese yen during trading on Tuesday, as we have threatened the ¥154.50 level again but failed to break out. I think ultimately, we are in a situation where we are just going back and forth and consolidating, looking for some type of reason to go higher to be Found Above

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The ¥153 level is an area that previously had been significant resistance and now should offer support based on market memory. I do think that ultimately, we go higher in this pair, mainly due to the fact that the interest rate differential continues to favor the US dollar, as the Bank of Japan has almost no real chance of cutting back on the quantitative easing that they have been in for 25 years or so.

Ultimately, even if the market does pull back, I think that it only ends up offering a nice buying opportunity, especially with the ¥152 level also offering support right along with the 50-day EMA at the ¥151.03 level. I don't necessarily think that we take off to the upside very easily, but I do recognize that eventually we could go looking to the ¥159 level, though that could take weeks, maybe even months.

EURUSD Chart by TradingView

This is a pair that has been grinding higher, and I would emphasize the word grinding here. I don't think that changes anytime soon because, quite frankly, the U.S. central bank, the FOMC, cut rates, and we have still rallied since that meeting in September and again in October. Ultimately, this is a pair that I think you just can't short. You have to pay for the privilege to do it anyway. So, I remain bullish.

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